Monday, June 22, 2009

Buy American = Fewer American Jobs, Not More

When Congress inserted “Buy America” protectionist provisions that required some goods (such as steel, cement, and textiles) financed by the stimulus bill to be made in America, our government invited a trade war with our economic partners. Now Canada and China are imposing their own protectionist regulations, potentially destroying well-paid American jobs in the export sector. Other countries may follow suit.The tragic losers of “Buy America” are free trade agreements and potential job growth in the American economy. Seductively, “Buy America” promises workers they can have it all: cheap goods from China, oil from Canada, as well as protection from global competition. But real life just doesn’t work that way. In reality, “Buy America” is shorthand for fewer jobs as other countries retaliate.Trillions of international dollars pass through America each year not because we are isolated, but because we are the hub of the world. Terrorists twice attacked the World Trade Center because the building symbolized international trade. They destroyed a building and murdered thousands of innocent Americans, but they failed to vanquish world trade. Sadly, politicians who erect barriers to trade are hostile not only to trade but to our country and to our jobs.~Diana Furchtgott-Roth

If you read the part about attacking US industries, that's where it fits in.

The only zombies that exist are in Third World places like China and India where creativity is completely absent from education. One number there determines whether you are free or enslaved for the rest of your life.

Still, Jpana, Korea and China have rocketed ahead following none of the policies suggested by Western economists. Personally, I am a free-marketeer and libertarian, maybe the only true one in this corner of the webworld.But obviously, there is more than one way to skin a cat. The Korean system of banking-manufacturing conglomerates, backed by government, seems powerful.It helps that Far East Asian countries have strong cultures, with low crime rates and good work ethics. I am sure there is government corrupttion, but it seems to be congruent with development, not destructuve of development, in those three nations.

The "Buy American" term does not have anything to do with China. China has not signed the government procurement section of the WTO (althought it said it would do so many years ago). This is logical because so many basic Chinese industries are government enterprises.

China doesn't need to retaliate because Buy Chinese is the standard except for key raw materials. We need to be careful with countries such as Canada and Mexico since they really are trading partners and not the fraud we have with China.